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Student loan uproar quiet in non-election year Colorado

Laurel Wiley helps second-year graduate student Matthew Hogan with financial-aid paperwork Tuesday at Colorado State University. Wiley, 20, is also a student going into her junior year with loans of her own. (Karl Gehring, The Denver Post)

WASHINGTON — Last year, President Barack Obama visited the University of Colorado at Boulder campus and urged 10,000 students packed in an auditorium to lean on Congress to prevent interest rates on federal subsidized student loans from doubling.

Hashtags were created along with a high-profile Twitter campaign. Students and parents wrote e-mails and called congressional offices in Washington. And, a couple days before the interest rate was set to double from 3.4 percent to 6.8 percent, Congress voted to extend the lower rate for another year.

What a difference a drowsy, non-election year makes.

The interest rates for subsidized Stafford loans doubled on July 1, affecting more than 154,000 Colorado students.

Colorado Classroom covers local and state education issues affecting K-12 and higher education students in the state of Colorado.

These people, strolling into campus financial aid offices this summer to apply for help this fall, will pay an average of $4,000 more on a $27,000 loan than they would have at the lower 3.4 percent rate.

And, to the chagrin of college financial counselors everywhere, very few people seem that agitated about it.

"He should come back!" said Ofelia Morales, associate director of financial student aid at CU-Boulder, referring to the president. "We are trying every day to reach out to the students and make sure they're aware. We get kids who dream about coming to CU-Boulder and they say, 'Where do I sign?' We are really paying attention to the debt counseling and trying to tell these students what is happening."

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The dearth of urgency or anger — both in Washington and on college campuses — is partly due to summer lethargy. Students are not en masse on campuses yet. Most loan disbursements for the fall, subject to the new rates, won't go out until mid-August and students won't be asked to pay more money until they graduate.

But the contrast between last year's fevered pitch on Capitol Hill and at the White House and this year's non-progress to fix something that negatively affects 7.2 million people is palpable.

Obama did deliver a college affordability speech in May, though the backdrop was the Rose Garden, and not a thundering auditorium of exercised 20-year-olds.

"If this sounds like deja vu all over again, that's because it is. We went through this last summer," he said on May 31. "Some of you were here. It wasn't as hot ... But we went through this. And eventually, Congress listened to all the parents and young people who said, 'Don't double my rate.' "

The past two weeks on Capitol Hill have produced debates on changing Senate rules, immigration reform and, this week, the U.S. House of Representatives is tackling another proposal to delay implementation of a key provision in Obamacare.

A compromise forged in the Senate that would have kept the rates low hit a snag earlier this month when the non-partisan Congressional Budget Office said the proposal would cost $22 billion over the next ten years — a non-starter for a number of members on the Hill, according to media reports.

The House hasn't much talked about it, yet.

"I believe we in Congress have a responsibility to either come to an agreement or to pass legislation that will keep interest rates at 3.4% for another year while those negotiations take place," said Rep. Jared Polis, D-Boulder, who represents both CSU and CU. "It is not fair to young people for their student loan interest rates to go up because of dysfunction in Washington."

Laurel Wiley, 20, is about to start her junior year at Colorado State University and projects her debt load to be between $20,000 and $22,000 when she graduates with her theater degree.

Wiley, a Fort Collins native, has taken on a blend of subsidized and unsubsidized loans and, on that amount of money, will end up paying about $3,000 more during the life of her loan with the higher interest rate.

"That will be when I'm starting out, when I'm looking for a job, when it comes down to it, that $3,000 will make a big difference for me," Wiley said.

She works in CSU's financial aid office and said only about one in five phone calls coming in is from a student fretting about the new rate.

"I've written to my congressman and I personally believe it can pass with a lot of support," she said. "But I'm not hoping for anything."

Tom Biedscheid, director of financial services at CSU, said Congress' inaction "truly means the lowest income students suffer the most."

He said he "loved" last summer's frenzy around the lower rates because it pushed Congress to act.

"But this year, I haven't heard a peep," he said. "It's the strangest thing."